Mark Lennihan / AP
A branch office of Capital One Bank is pictured on May 7, 2009, in New York. Capital One Financial is buying Discover Financial Services for $35 billion, in a deal that would bring together two of the nation’s biggest lenders and credit card issuers, according to a news release issued by the companies Monday, Feb. 19, 2024.
Wednesday, June 5, 2024 | 2 a.m.
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Over the course of my political career, I worked day-in and day-out for candidates and initiatives that promoted economic equity and empower underserved communities.
As an attorney and former operative for many Democratic elected leaders, including Rep. Susie Lee of Nevada, I am keenly aware of the challenges that communities across the state have had in accessing credit. That’s why I see a tremendous opportunity for Nevadans with the proposed merger between Capital One and Discover, particularly in enhancing credit access for those who have historically faced barriers to financial inclusion.
Capital One has a strong track record of serving communities often neglected by traditional banks and has focused objectives to deliver on the principles of the Community Reinvestment Act (CRA), which was created by the federal government to deal with the legacy of redlining — a practice that held back so many communities of color. The law encourages banks to serve low- and middle-income communities that banks too often left behind, many times intentionally.
Today, Capital One has approximately one-third of its branches situated in low- and moderate-income neighborhoods and has been ranked by the Federal Reserve as “outstanding” in achieving the objectives laid out in the CRA. Underlining its commitment to these principles, in its announcement proposing the merger with Discover, Capital One proudly stated it has “ranked first or second in community development lending among all banks since 2015, with over $59 billion in CRA-qualified loans over that period.”
Merging Capital One and Discover has the potential to significantly expand these efforts and stimulate economic growth in communities that have historically been stifled.
Moreover, Capital One’s commitment to financial inclusion, exemplified by initiatives to provide credit tailored for individuals establishing or rebuilding credit, demonstrates its dedication to empowering people to achieve their financial aspirations responsibly. The merger will enable Capital One to leverage Discover’s expertise in serving credit-invisible individuals and further extend its reach, bridging the gap for those previously excluded from traditional banking services.
Some critics have voiced concerns about market concentration, but a merger would better Capitol One to compete with the Big 5 banks, and combining the power with Discover’s payment network would inject competition in the credit card network processing market that is dominated by Visa and Mastercard.
Approving this merger would not only enhance credit accessibility and banking services but also foster competition and innovation within the financial services industry, benefiting consumers and small businesses alike.
Financial services have too often overlooked minority, low-income and poor credit communities — that is why this proposed merger between two companies that are focused on these communities and allow them to better compete with the big boys is a wonderful opportunity to turn the tables.
I urge regulators to prioritize economic equity and recognize the transformative potential of this merger for underserved communities. By expanding access to credit and promoting financial inclusion, the collaboration between Capital One and Discover would represent a significant stride toward building a more inclusive and prosperous future for communities across the nation.
Jonathan Pattillo is an attorney and former Democratic campaign strategist in Southern Nevada.
